Toll said Wednesday it has seen an increase in homebuyers putting down deposits during nine of the past 11 weeks, compared to weekly figures from fiscal 2008.

"In the last couple of weeks, which on a seasonal basis should stink, we do see fewer (contract) cancellations coming in than we would have normally expected," said Robert Toll, chief executive officer.

None of them, however, is ready to jinx it by calling the bottom. They say the recession and fear of job losses are keeping many would-be homebuyers on the fence.

"There certainly are risks remaining," Chief Executive Ara Hovnanian said Wednesday, noting a recent increase in mortgage rates and another year of rising foreclosures, among other dangers.

"In short, we are mindful that there's still some pain that lies ahead ..." the executive added.

Still, even in places like Stockton, Calif., one of the nation's epicenters of foreclosure, there is now less than a two-month supply of homes for sales, Hovnanian said.

The builder reported a jump in new home contracts during the quarter, a lower number of buyers backing out and more stability in home prices the last six weeks.

However, while Hovnanian's new home orders per community jumped 25 percent in its second quarter, new home contracts were down 29 percent overall from a year earlier.

The builder said it lost $83.2 million, or 52 cents a share, on sales of $398.3 million in the fiscal quarter ended April 30. The results were in line with analysts' estimates and slightly better than the loss of $93.7 million, or 59 cents a share, on $818 million in sales in the year-ago period.

The rate at which the builder is getting customers who give deposits to complete the deal remains low, Barclays Capital analyst Megan McGrath observed in a research note Wednesday.

The rate at which homes lost value slowed in the first quarter, according to an analysis of metro areas by IHS Global Insight.

The most severe price declines continued to be seen in Florida, California, Nevada and Michigan, the firm said Wednesday.

Sales of new homes were flat in April, but up 7 percent over January's low, the Commerce Department reported last week. And the number of homebuyers who signed a contract to buy a previously owned home in April posted the largest increase in nearly eight years.

But Deutsche Bank analyst Nishu Sood cautions that homebuilders' orders between January and April remain down sharply from the prior-year period. He expects demand for housing will soften in the next few months.